THE EAST PACIFIC MERCHANDISING CORPORATION, PETITIONER VS. THE DIRECTOR OF PATENTS AND LUIS P. PELLICER, RESPONDENTS.

Petition for review of the resolution of the respondent Director of Patents,
dated June 24, 1958, insofar as he denied the petitioner’s application for
registration of a trademark; and of the order of the same respondent dated July
21, 1958, denying petitioner’s motion for reconsideration and, at the same time,
reinstating respondent Luis P. Pellieer’s opposition to the registration.

The records disclose that on June 14, 1947, Marcelo T. Pua filed with the
Office of the Director of Commerce an application for the registration under Act
666 of the composite trademark consisting of the word. “Verbena” and the
representation of a Spanish lady, more particularly described as follows:

“Against a blue background is the hust figure of a Spanish Señorita dressed
in a typically pink dancer’s attire with her upper saw partly covered with a
Spanish shawl of green and white. The figure appears with black well groomed
hair adorned by red roses. The figure also appears to be wearing two green
earrings. At the left of this figure is shown a balcony decked with plants and
flowers characteristics of Spanish houses.” (p. 10, Records)

The applicant further alleged that the trade-mark applied for has
continuously been used by him in commerce since August 15,1947 on such
merchandise as lotion, face powder, hair pomade, brilliantine, and. other allied
products.

On or about November 4, 1953, Pua assigned his rights to the trade-mark in
question, as well as to the pending application for the registration thereof, to
the herein petitioner, East Pacific Merchandising Corporation. The latter
renewed the application under the new trade-mark law (R.A. 166) at the Patents
Office on November 8, 1957.

The usual proceedings that follow after the filing of applicatipna for
registration were had in the office of the respondent’ Director of Patents. On
March 5, 1957, an examiner of the Patents Office submitted a report to the
Director, recommending the allowance of the application, and the latter, acting
on the said report, approved petitioner’s application for publication in the
Official Gazette.

On May 23, 1957 Luis P. Pellicer filed an opposition, to the application on
the following grounds: (a) that the picture of a lady is common in trade and the
name “Verbena” is the generic name of a flower and, therefore, neither may be
exclusively appropriated or registered by the applicant; (b) the applicant
should not be allowed to bar from employing this term those who use the genuine
verbena essence in the manufacture of their products; and (c) the applicant in
the adoption and use of said trade-mark is deceiving the public. In support of
his allegation that he would be damaged by the registration. of the trade-mark
applied for, PeHteer attached, to the opposition certain labels bearing the
trade-mark “Lupel Verbena”, which trade-mark,oppositor avers, was registered in
his favor under Certificate of Registration No. 5851, issued by the Patents
Office on April 27, 1957, and actually being used by him in commerce to identify
his hair pomade.

Petitioner moved to dismiss the opposition, averring, among other things, (a)
that the oppositor, respondent Pellicer herein, was ordered by the Court of
Appeals in CA-G.R. No. 10698 (Luis P. Pellicer vs. Marcelo T. Pua) to
refrain from using the trade-mark “Verbena” in any form in connection with his
business; and (b) that its own mark had already acquired a secondary
significance as a trade-mark;

After due hearing on the motion to dismiss the opposition, with both parties
submitting evidence in support of their respective contentions, the Director of
Patents promulgated the appealed resolution of June 24, 1958, wherein said
Director opined that the term “Verbena” is “generically descriptive or
misdescriptive of the products, namely, lotion, face powder, hair pomade and
brilliantine, while the representation of a Spanish lady is not only deceptively
misdescriptive of the source or origin, but also common in trade,” and,
consequently, denied their registration. In dismissing respondent Pellicer’s
opposition, the respondent director ruled that, since the question of who has
the exclusive right to the use of the trade-mark in question has already been
finally adjudicated by the courts^[1] in
favor of Marcelo T. Pua, the herein petitioner’s predecessor-in-interest, as
against Luis P. Pellicer, the latter is now barred from perfecting any
opposition to the application.

Upon motions for reconsideration filed by both parties, the Director of
Patents issued an order, dated July 21, 1958, reiterating his denial of the
registration applied for by petitioner Merchandising Corporation, but, on the
other, hand, reinstating Pellicer’s opposition upon the ground that a closer
study of the court decisions and resolutions already referred to revealed that
the same did not actually pass upon the validity of the word “Verbena” as a
registerable trade-mark.

Hence, this petition for review by the East Pacific Merchandising
Corporation.

Petitioner’s first proposition relates to a procedural point. It urges that
once the publication of the application for registration is approved by the
Director of Patents, it becomes his ministerial duty to issue the corresponding
certificate of registration upon payment of the required fees. This same
contention has already been resolved by this Court in the case of Ong Ai Gui
vs. the Director of Patents, 96 Phil., 673; 51 Off. Gaz., No. 4, 1848,
wherein, among other things, we said:

“* * * It will be noted that ihere are two steps in the proceedings for the
approval of an application for registration; the first is that conducted in the
Office of the Director and taking place prior to publication, and the second,
that conducted after publication, in which the public is given the opportunity
to contest the application. In the first, the application is referred to an
examiner, who, after study and investigation makes a report and recommendation
to the Director who, upon finding that applicant is entitled to registration,
orders publication of the application. (Sec. 7, Rep. Act No. 166) If he finds
that applicant is not entitled to registration, he may then and there dismiss
the application. In the second, opportunity is offered the public or any
interested party to come in and object to the petition. (Sec. 8, id.),
giving proofs and reasons for the objection, applicant being given opportunity
also to submit proofs or arguments in support of the application. (Sec. 9,
Id.) It is the decision of the Director, given after this hearing, or
opportunity to every interested party to be heard, that finally terminates the
proceedings and in which the registration is finally approved or disapproved.
Thereafter, notice of the issuance of the certificate of registration is
published. (Sec. 10, id.)

It is evident that the decision of the Director after the; first step,
ordering publication, can not have any finality. Of what use is the second step
in the proceedings, if the Director is bound by his first decision, giving
course to the publication? His first decision is merely provisional, in the
sense that the application appears to be meritorious and is entitled to be given
course leading to the more formal and important second step of hearing and
trial, where the public and interested parties are allowed to take part.”

Like the petitioner here, Ong Ai Gui questioned in the case cited the
propriety of the denial of his application for registration, notwithstanding the
previous order of publication and the dismissal of the opposition by the
Director of Patents. We did not find any legal inconsistency in the said actions
of the Director; and the same conclusion is warranted in this case.

Petitioner, however, argues that it was error for the Director of Patents to
have ruled on the registerability of the trade-mark in question, when what was
only submitted and heard for his resolution was petitioner’s motion to dismiss
the opposition of Pellicer. The premise is not accurate. The opposition did put
in issue the registerability of the composite trade-mark applied for, thus:

“(a) The picture of a lady is common in trade and the name ‘Verbena’ is the
generic name of a flower and therefore both cannot be exclusively appropriated
or registered by the applicant; (b) the applicant should not be allowed to
prevent others from using this term who uses the genuine verbena essence in the
manufacture of its products: and (c) the applicant in the adoption and use of
said trade-mark is deceiving the public.”

and petitioner East Pacific Merchandising Corporation impliedly met this
issue in its motion to dismiss, with the allegation that “the word mark
‘Verbena’ has already attained a secondary meaning.” When the incident was heard
in due course, the parties were expected, and were given the opportunity, to
submit arguments and present evidence to sustain their respective contentions.
The transcript of stenographic notes taken during- the hearing reveals that the
parties actually made use of that opportunity (see p. 13, et seq., t.s.n.,
hearing of September 11, 1957). Consequently, when the Director of Patents also
resolved the question of whether or not the trade-mark applied for was
registerable, he cannot be charged with having gone beyond the matters then
before him for resolution.

Moreover, the respondent Director based his denial of the registration upon
the provisions of Republic Act No. 166 (Sec. 4), on the theory that the
questioned trademark is generically descriptive or misdescriptive of the
products, and that the representation of a Spanish lady is not only deceptively
misdescriptive of the source or origin (the goods covered being produced in the
Islands and not in Spain), but likewise common in trade. There seems to be
little doubt but that the questioned resolution of the Director could have well
been made upon those grounds even prior to the order of publication in view of
the statements found in the application and in the supporting documents thereto
attached (see Section 7 of Republic Act No. 166). That the Director instead
caused the dismissal of the application only after its due publication is not,
in our opinion, a procedural error that is reversible on appeal. Neither did
such publication divest the Director of,the prerogative to dismiss the
application.

The petitioner next questions the legality of the order of the respondent
Director of Patents, reinstating Pellicer’s opposition. Petitioner argues that
there was no valid motion for reconsideration filed by respondent Pellicer as a
basis for the reinstatement; that petitioner was deprived of its right to file
an answer to the opposition; and, finally, that the fundamental principle of
estoppel was erroneously disregarded by the Director.

There is clearly no merit on petitioner’s first ground. The Director of
Patents could have reinstated Pellicer’s opposition even motu proprio,
with or without a valid motion for reconsideration, provided, of course, the
same was done by him in due time or while he still had jurisdiction over the
case (and the contrary has not been shown in this case). Granting, therefore,
that the motion for reconsideration filed by Pellicer was, as petitioner had put
it, “a mere scrap of paper”, such fact does not, by itself alone, invalidate the
order which was otherwise regularly issued.

Also without merit is the petitioner’s contention that it should have been
allowed by the respondent director to answer the opposition when it was
reinstated. It does wvt appear that the petitioner had reasons other than those
alleged by it in the rejected application and motion of reconsideration of July
30, 1958; nor that petitioner asked for an opportunity to reply to Pellicer’s
opposition after the same was reinstated.

As its third ground, petitioner urges that respondent Pellicer is now in
estoppel to claim any damage on account of the registration prayed for (a
condition precedent before one may validly file an opposition), or deny the
validity of the trade-mark in question. In support of this contention,
petitioner calls our attention to the decision of the Court of Appeals in CA
G.R. No. 10698-R, promulgated May 30, 1955 (entitled Luis P. Pellicer
vs. Marcelo Pua), which affirmed that of the Court of First Instance of
Manila (Civil Case No. 6262), dismissing plaintiff Luis P. Pellicer’s
“complaint”^[1] to enjoin Marcelo T. Pua,
his representatives or assigns—

“* * * from manufacturing and selling, or causing to be manufactured or sold,
articles and products with ‘Verbena’ and/or ‘Povil’ labels and from
manufacturing, using and selling, or causing to be manufactured, used or sold,
jars and bottles closely resembling his patented jars and bottles; to seek the
payment of damages by the defendant to the plaintiff as a result of the acts
done by the aaid defendant sought to be restrained by the said plaintiff; andi
to order the defendant to surrender to the court all articles and products used,
or intended to be used, by the said defendant in violation of plaintiff’s
trademark and patent rights, so that the Court may order the destruction of said
articles and products, in accordance with law.”

Perusal of the decisions relied upon by petitioner reveals that Pellicer had
sought to enjoin Marcelo Pua (petitioner’s predecessor in interest) from using
the “Verbena” trademark on the ground that Pua’s purchase thereof from the Alien
Property Administrator had been declared void in a prior suit to which Pua was
not a party; naturally, the Court of Appeals refused to issue the injunction
because it felt that the validity of Pua’s acquisition “must first be overcome
in a proper action where he is accorded full opportunity to defend it”. Neither
the registera-bility of the “Verbena” trademark, nor the possible confusion with
respondent Pellicer’s own “Lupel Verbena” trademark, was in issue in the
preceding litigation; wherefore, the decision of the Court of Appeals does not
work an estoppel on respondent Pellicer, barring him from contesting the
registration of petitioner’s trademark.

At any rate, even if Pellicer were so estopped, the Director of Patents would
not be foreclosed thereby from inquiring into the registerability of the
trademark applied for, since he can do so whether or not there is opposition by
private parties (sec. 7, R.A. 166).

Petitioner urges that it was entitled to the registration for the reason
that—

“firstly, that the composite trademark ‘Verbena’ and the figure oi a
lady, considered as a whole, is not generic in nature or descriptive oi-
deceptively misdescriptive of the products to which it is associated:
secondly, that the trademark has acquired a secondary meaning beforf
the public; and, thirdly, that appropriation of the trademark having
occured under the former law (Commonwealth Act 666), the right thereto cannot be
taken away under the subsequent law.”

The term “Verbena” being descriptive of a whole genus of garden plants with
fragrant flowers (Verbenaceae), its use in connection with cosmetic
products, wherein fragrance is of substantial import, evokes the idea that the
products are perfumed with the extract of verbena flowers, or of some oil of
similar aroma; and, regardless of other connotations of the word, the use of the
term can not be denied to other traders using such extract or oils in their own
products. It follows that the Director oi Patents correctly held the term to be
non-registerable in the sense that petitioner company would be entitled to
appropriate its use to the exclusion of others legitimately entitled, such as
oppositor Pellicer. The denial of registration is further strengthened by the
Director’s express findings that petitioner does not use verbena essences in his
products.

In a leading case, Caswell vs. Davis, 17 Am. Rep. 233, 241, 242, the
court, on a similar issue, said:

“There is no principle more firmly settled in the law of trademarks, than
that words or phrases which have been in common use and which indicate the
character, kind, quality and composition of the thing, may not be appropriated
by any one to his exclusive use. In the exclusive use of them the law will not
protect. * * * Nor does it matter that the form of the words or phrases adopted
also indicate the origin and maker of the article. The combination of words must
express only the latter. It is the result of all the decisions, that known words
and phrases indicative of quality and composition are the common property of all
mankind. They may not be appropriated by one to mark an article of his
manufacture, when they may be useS truthfully by another to inform the public of
the ingredients which make up an ar-ticle made by him. Even when the sole
purpose of the one who first uses them is to form of them a trademark for
himself expressing only of origin with himself, if they do in fact show forth
the quality and composition of the article sold by Him, he may not be protected
in the exclusive use of them. Still less, then, when joined to the fact that
they do thus show forth the quality and composition, there is a purpose that
they should do so. It is a right which everyone has, and from the exercise of
which he may not be debarred, to make an article of the same ingredients, of the
same composition and of as good quality as that made by another, when that other
has no exclusive privilege of manufacture conferred by law. Having this right to
make, he has also the Tight to indicate the ingredients; the composition and
quality of that which he has made, by any usual words or phrases apt therefor.
Hence, when he adopts usual phrases which do no more than this, he but takes
from a stock common to all mankind, and does not infringe upon any exclusive
right of another, who has, before that, used the same, or like words or phrases.
* * *” (cited with approval in 52 Am. Jur., Sec. 58, pp.
644-545)

The result would not change even if the Director erred in ruling that the
figure of a lady, as previously described, is likewise not registerable as a
trademark. The figure, it may be granted, wag drawn on arbitrary and whimsical
lines and styled in a peculiarly distinctive manner; but that fact will not
qualify the word ”Verbena” for registration, since the combination of the two
marks would still be inadequate to guard against the misleading effects that
flow from the use of the term by petitioner.

The claim that the petitioner is entitled to registration because, the term
“Verbena” has already acquired a secondary significance is without merit. The
provisions of law (Rep. Act No. 166, sec. 4) require that the trademark applied
for must kave “become distinctive of the applicant’s goods”, and that a
prima facie proof of this fact exists when the applicant has been in
the “substantially exclusive and continuous use thereof as a mark or tradename *
* * for the five years next preceding the date of the. filing of the application
for its registration”. Here it appears not only that applicant and his assignor
(Pija) only began use of the alleged mark in the year 1947, the same year when
the application was filed; but that such trademarks as “Verbena Poyil” and
“Lupel Verbena” had long been in use by respondent Pellicer on his owri
cosmetic products, and that, as a matter of fact, he is.,£he holder of a
certificate of registration from the Patents Office for the trademark “Lupel
Verbena”. Said facts preclude us from concluding that the trademark in question
has become distinctive of applicant’s goods within the meaning of the law.

Finally, petitioner corporation argues that for the Director of Patents to
deny registration of his trademark under Republic Act 166 would violate the rute
against ex post facto laws, because when the trademark was sold to its
predecessor Marcelo Pua, it was already registered. The question of trademark
registerability being without any penal aspect, the prohibition against ex
post facto legislation evidently does not apply. But considering the
argument as one against infringement of vested rights (which is what petitioner
probably meant), it should be recalled that Pua applied in 1947 for a
new registration under the old law (Act 666) while petitioner
corporation reiterated the application in 1957 under Republic Act No. 166.
Neither applied for a renewal of registration under section 41 of the
new Act, nor did petitioner surrender the original certificate of registration
of the trademark for revalidation as the Act requires. This conduct of
petitioner shows that-either the trademark had not been validly registered under
the old trademark laws or else that such registration, if any, had already
expired when the new application was filed. The Director of Patents, therefore,
did not err in deciding the application as a new one under the new trademark
law, Republic Act No. 166.

Conformably to the foregoing, unless the petitioner makes a disclaimer of the
word “Verbena”, the application should be held as properly denied by the
Director of Patents. The orders reinstating respondent Pellicer’s opposition are
affirmed.

The case is ordered remanded to the Director of Patents for further
proceedings in accordance with this opinion. Without special pronouncement as to
costs.

Bengzon, Bautista Angelo, Labrador, Concepcion, Gutierrez David,
Paredes, and Dizon, JJ., concur.

Case remanded for further proceedings.

---

^[1] Civil Case No. 6262 of the Court
of First Instance of Manila July 31 1952, CA G.R. No. 10898, May 30, 1955; and
SC-G.R. No. L-9S68, September 8, 1955.

^[1] Construed by the Court of Appeals
as, in reality, a petition for injunction.